Dismal tax collection in Delhi sparks meltdown fear

With the first six months of 2012 showing tax collections of just about 48% of the annual target, govt is worried about state’s financial health. (PTI photo)

NEW DELHI: With the first six months of the current fiscal showing tax collections of just about 48% of the annual target of Rs 25,670 crore, the Sheila Dikshit government is worried about the state's financial health.

While the economic slowdown and rising inflation are seen to have severely impacted sales tax collection, the finance department has asked the VAT commissioner to bring into the fold those still outside the tax net. Each sales tax officer has been given a target for his or her area. There are over 2.6 lakh dealers who come under the purview of value added tax (VAT).

The revenue target of the state in the budget estimates for 2012-13 stands at an ambitious Rs 25,670 crore. Sales tax makes up for two-third of the state's tax collection target. From sales tax alone the annual target for this year is Rs 17,000 crore. As per data available with the finance department between April and October the collection stands at Rs 8,687 crore.

The collection from stamps and registration fee, too, stands at a dismal Rs 1,355 crore compared to an annual target of Rs 4,300 crore till October . This is barely 25% of the total target and already appears tough to achieve. With a sluggish market impacting property sales the government has now tied its hopes to a proposal for effecting a hike in circle rates in the weeks ahead and open registry of properties in the colonies list that have been regularised on paper.

According to sources in the finance department, the collection from VAT needs to pick up if the annual target must be achieved. Principal Secretary, Finance, DM Spolia is learnt to have met various trade associations. He has sought their cooperation in improving tax collection.

VAT commissioner Prashant Goyal told TOI not everyone is paying the VAT due from them. "The government is also planning to augment our workforce," Goyal said.

Goyal said some areas where people fail to pay revenue include construction and maintenance projects. "These and other such areas are in focus and people will be brought under the tax net. In the third quarter, we have shown improvement and managed to take the VAT collection so far to over Rs 9,000 crore," he said.